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Meanwhile, those who only repay their advance payment will not see the amount they receive change, and this will remain at 15%.

Will Quince, Minister for Welfare Delivery said: “We know that many people move onto Universal Credit with existing debt, or choose to take up an advance to support them before their first payment.

“While safeguards are already in place to ensure that deductions are affordable we’ve taken this extra step to reduce the standard maximum deduction rate from 40% to 30% of the claimant’s standard allowance to ease the burden.

“Unlike the old system, Universal Credit is a flexible benefit that can be adapted as people’s needs change, ensuring they have more control over their working lives and their finances.”

Under the new changes parents will also have extra time to claim their childcare costs back from October 16.

From then working parents and guardians will have an additional month to claim back up to 85% of eligible childcare costs with universal credit.

Previously parents had to declare their costs in the same period where they incurred.

Critics said the previous time limit left households at risk of falling into debt.

The Minister for Employment, Mims Davies, said: "Sometimes there just aren’t enough hours in the day to get everything done, and that’s before something unexpected happens like a trip to the hospital or having to stay late at work.

"We are determined to support families to balance work-life and parenthood.

"Allowing an extra month-long assessment period for people to report their childcare costs means people shouldn’t have to worry about missing out on crucial payments they are entitled to."

The new thresholds means claimants can keep more of the cash themselves (Image: Getty)